Leslie Moonves, president and chief executive officer of CBS, talks about the challenges of the Internet and why network television is indispensable.

1. How do you see the role of the director changing in television?

Clearly the director-producer has become a much more important function. Now in episodic television a number of shows have a director who's not only doing normal directing but is also really setting the tone and the vision for a whole show. So you have a really strong, solid hand in keeping the continuity going, and I think to have that sort of eye around all the time has served television extremely well. And I think the director's role clearly becomes more and more important in episodic television. I remember a day when a director would deliver a rough cut and then disappear on to his next assignment. I really appreciate the continuity and ability of the director to have a much more important role in the whole process.

2. You've said that the wave of the future is getting as much distribution as possible on the Internet. How can CBS and online distributors profit from Web content?

The future of Web content obviously will involve a certain amount of streaming of the actual series, but that's not where we look for the majority of the growth. We look for it out of clips, out of off-shoots, out of other potential places—content that isn't necessarily just cannibalistic to what's on the networks. For all of us in the creative community, technology is the big question mark. Is it a friend or an enemy? We're viewing it as a friend. We think the world clearly still needs and wants network television. But by the same token, an awful lot of entertainment and information is coming over the Internet and we want to be all things to all people. So the more places we can have our content available and the more readily it's available, the better it is for us.

3. How does that turn into revenue?

Well, we acquired CNET about four or five months ago and we are now one of the top ten Internet companies in the world. Our job now is to monetize it, i.e., sell this content, be it scripted programming or technology or news or sports or games. And look, we are an advertising company. Seventy percent of our revenues are in advertising. We believe in advertising. Obviously now is a tough time for those companies that are advertising-based, but that will come back. Therefore, it's really, key to get many eyeballs on the Internet like you do for the network or you do in a movie theater, and hopefully be able to sell them accordingly.

4. Do you see the model for network broadcast television continuing as it is today?

Absolutely. When you look at what I like to call event programming—and that doesn't mean it can't be episodic—and you look at what the Super Bowl does or CSI or American Idol or Desperate Housewives or what "24" does, there's no place on earth you can get 25-30 million people joining together for a shared experience. And I think as the Internet grows—and it will—it's still important to realize the network is where you get the best bang for your buck. It's where you can open a movie, it's where you can open a product, it's where you can really open up the widest net possible to get everybody. It's important to realize that oftentimes products are really hard to pinpoint to a demographic. So there's still an advantage to having a show that's watched by an 18-year-old as well as a 60-year-old. You don't know what is going to work [for that product], but the wider the net, the better your prospects.

5. What do you think about the prospect of ad-supported Internet streaming?

We're doing it right now. We have what's called the CBS Audience Network, whereby we stream a number of our television shows to over 300 different websites. We sell advertising to go out among them. Now, it's still a rather small piece of our revenue. It's something we see growing and something we are experimenting with and going out there with in the future. But once again, it's important that our content be as readily available as people want it.

6. If the Internet is not just for the regurgitation of content, how do you see that evolving?

We don't think it's just for, or even principally, for streaming of episodes. Yes, that will be part of it. But we view it in relation to content that is attached to the networks, that is an extension of our news, our sports, new material on technology or business. And when it comes to entertainment, certainly clips are worthwhile for promotional and many other reasons. The chat rooms give people who are fans of, say, Two and a Half Men the ability to get information about actors or directors who are involved with their favorite shows or movies. In other words, ancillary ways of increasing the experience that you have with television or a movie theater that makes that experience deeper, richer, and longer-lasting. And that makes them more loyal fans to that content.

7. Do you see Web-based series expanding, and can content creators make money in this arena?

Once again, this is an area that's still in its infancy. We've only done it a couple of times, frankly, from kids out of a garage. You know, give me thirteen, three-minute episodes for $25,000. Obviously, we view the Web as a great future laboratory for both young people starting out and established people who want to try out different things that may be cost-prohibitive on a network. And ultimately I think there's a real opportunity that a Web-based show could develop into something for the network or exist very successfully on the Web. It's an area that is so young and we know so little about what its prospects are that it's really a great experiment. It's something we're watching very carefully because right now there's no revenue behind it, but it's something that clearly will be significant in the future.

8. What impact do you see the present financial crisis having on the network and the industry as a whole?

Obviously, advertising is very affected by what's going on today and, by definition, that does affect revenues coming in to the major media companies and leads them to be more conservative about how they produce shows and keep costs down. There's a lot more belt-tightening and there's a lot more examination of how we produce our content. Our local businesses are being affected greatly, the national businesses not quite as much. But as revenues do go down—and they are going down—costs by definition have to go down, and it's a time where everybody has to realize, okay, we're going through a tough time, let's look at our industry as a whole and how we can continue to thrive in a tougher economic climate.

9. It's been suggested that lower-rated shows might get renewed rather than risking the cost of new programming. Is there any truth to that?

Look, launching a show is always a very tough thing to do. So we are firm believers that patience can be a virtue if you believe in the creativity of the show, and I think this economy might cause people to be a bit more patient, which can be a good thing.

10. You've said that the content today is as great as it's ever been, that this is another golden age of television. Do you still feel that way?

No question about it. When you look across the top networks and top cable networks, I think you could point to the terrific work being done by all four networks, and by Showtime, HBO, A&E, and a number of the cable networks. I think there's never been a time in the history of television where there's more great things being done. Creatively, I think our universe is in very, very good shape.

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